QF has announced they are cancelling or deferring 12 narrowbody orders to better match demand. No details of what aircraft have been cancelled though I'd guess they are 738s. Copy of ASX announcement available at www.asx.com.au/asxpdf/20110615/pdf/41z70sxg68v449.pdf

Interesting given they are saying that the QF International ops is where their profit problem is, so the corollary is that domestic is ok, so may be domestic profitability is not as strong as expected.

Seems inconsistent with the earlier comments Joyce made on investments in the international operations (which is desperately needed anyway).

Quoting AusA380 (Reply 4):Interesting given they are saying that the QF International ops is where their profit problem is, so the corollary is that domestic is ok, so may be domestic profitability is not as strong as expected.

The two operations are somewhat independent and should be looked at in isolation.

From what I can work out QF domestic (flying standard A320's and 737's) can adjust its fleet to match demand quite quickly. On the other hand QF international has to deal with many long-lead time items and customisation of aircraft, so this part of the business can't respond as quickly as domestic.

The good news is QF advised an increase in Cash at Bank (year on year) and all further aircraft acquisitions can be made from operating revenues.

I have a feeling that this deferral/cancellation may involve JQ 32Xs. QF really needs to take on the new upmarket DJ head-on and the threat from Tiger seems to be diminishing. Maybe JQ's growth needs to be cut back a bit. There has also been a lot of chatter recently about QF re-entering old markets they left with the emergence of JQ. OOL and Tasmania have been mentioned. QF needs to replace those 734s and there are more JQ 32X orders in the pipeline than QF 738s.
But I could be wrong.

Missed this thread when I posted similar. I have suggested deletion of the duplicate, but from that the Crikey link is more useful than most.
Stock exchange announcement from Qantashttp://www.asx.com.au/asxpdf/20110615/pdf/41z70sxg68v449.pdf
Joyce has announced that Aircraft lease plans will be reduced by Aus$300 million with Qantas now expecting to take delivery of 34 aircraft in 2011-12 instead of the 43 previously announced. The 12 appears to come from orders for 12 narrow-body jets would be cancelled or deferred, including three anticipated in the second half of this year.

But will they be for Qantas (737s) or Jetstar (32x)? That appears unclear.

One thing that is curious about this rethink is that unless QF took out currency hedging - which they probably did - these planes they are cancelling must be going to cost about 20 to 30% less than when they ordered them. Or in other words, maybe this is a bit worse than it appears.

Another oddity is that AJ keeps moaning he is losing money on long haul but doing quite nicely on domestics. But the cancellations appear to be concentrated on domestics. Why so?

Key points of the fleet plan update, which covers the period through to the end of FY13:

- lease of five additional B737-800s, and the extension of leases on two B737-800s, for Qantas
- lease of 10 additional A320s, and the extension of leases on 11 A320s, for Jetstar
- lease of one A330-200 for Jetstar
- purchase of 10 Fokker 100s for Network Aviation
- lease of two additional B717s for QantasLink

It sounds like it could be any combination of these but if it is B738 or A320 both OEM's will have the problem allocating the freed up delivery slots.

I think it would restore some people's faith in QF is these cancelations/deferals were not infact for QF but JQ. Whilst I undserstand the board manages the expectations of the shareholder who can't defferientate between JQ and QF, all they see is a short term dividend. I feel that without further investment in QF (yes perhaps even to the detriment of investment in JQ) the long-term outlook for the QF sharehoulders, perhaps even short term considering how low their current price is, shall only get worse!

Quoting AusA380 (Reply 4):Interesting given they are saying that the QF International ops is where their profit problem is, so the corollary is that domestic is ok, so may be domestic profitability is not as strong as expected.

Confusing again as it was noted by the Alan Joyce and his team that the international operation is continuing shrinking to a point where economies of scale will be lost and it will not be able to be supported any longer. Thus the creation of Lesely Grants team to analyis new posibilites for expansion and profitablity. However Alan Joyce stated that they will not be investing any money into international operations until it returns to profability... How will it grow to become profitable again without investment?